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Russian coal exports to energy-hungry China have jumped by about a third this year but the supply boom is being constrained by transport infrastructure limitations, industry sources and officials said.

China is seeking coal supplies from overseas, in particular after recent COVID-19 outbreaks in the major coal mining regions of Inner Mongolia and Shaanxi forced many mines to close, while coal demand at power generation and heating sectors will soon pick up with the coming of winter.

The Kremlin plans to increase its energy supplies to Asia, China in particular, to offset a slump in exports to the West, which has imposed sanctions on Russia over the conflict in Ukraine.

Russia is the world's sixth-largest coal producer and one of top coal exporters, along with Indonesia and Australia. Its share of global coal exports reached 17% last year with supply of 223 million tonnes.

But now with more exports heading east towards Asia as opposed to west towards Europe, bottlenecks are appearing.

"Many of us were informed by the sellers that there will be delays on loading and arrivals, which causes trouble to our business," a Chinese coal trader said.

Another source said that some traders were simply told by sellers or miners that a coal shipment was cancelled due to the lack of rail capacity and could be delayed for weeks.

Russian First Deputy Prime Minister Andrei Belousov has acknowledged the problem with infrastructure constraints, saying this month that the situation with coal exports and congestion on the rail system had not stabilised, though it was improving.

China's coal imports from Russia fell to 6.95 million tonnes last month, down from a peak of 8.54 million tonnes in August, according to China's customs data.

According to Russian transport industry sources, Russia has increased coal supplies to China by railways by about a third this year, to 27.6 million tonnes in the January-August period.

WINTER DEMAND

But the increase in cargo traffic has led to slower deliveries.

According to a Reuters analysis, it took about 12.6 days to deliver a coal cargo from fields in Siberia, such as Kuzbass, to Russia's Pacific ports in July-September, compared with 11.3 days on average in the same period last year.

On average, delivery time across Russia has increased by a fifth, or 1.4 days, according to Reuters analysis of railway data, and timings may increase in the winter due to the railway congestion and port capacity limitations.

"We would expect China's coal imports from Russia to decrease due to the cool weather, which will limit port loading, and the rail logistics cap will also help to put a lid on," the Chinese coal trader said.

Of Russia's total of 223 million tonnes of coal exports last year, 49 million tonnes were delivered to Europe, according to the Energy Ministry.

But Russia now expects its coal exports to decline in coming years due to the Western sanctions over the Ukraine conflict, and U.S., European Union and British embargos on Russian coal imports.

According to Russian government expectations, coal exports may fall by 22% this year and by a further 31% in 2023.

But at the same time, the rush of east-bound exports is getting bogged down.

"A lot of railcars accumulate, congestion is formed at port stations ... Turnaround times for railcars are increasing significantly. Shippers are looking for empty railcars," a Russian transport industry source said.

Russian Deputy Prime Minister Alexander Novak said Russia plans to increase the capacity of its infrastructure, including that of its eastern ports, where capacity is expected to increase by between 55 million tonnes and 211 million tonnes per year by 2031 from 150 million tonnes now. (Reuters)

South Korea's opposition lawmakers boycotted President Yoon Suk-yeol's first budget speech to parliament on Tuesday to protest against a criminal probe surrounding the opposition leader, in an escalating battle of wills that could complicate deliberations.

Yoon mapped out details of the 639 trillion won ($445 billion) proposal for next year to a half-empty National Assembly hall that was missing members of the Democratic Party, which holds a majority in the 300-strong parliament.

Yoon's conservative government will need the Democrats' support to fund spending on a post-coronavirus recovery and a more aggressive response to North Korea's evolving nuclear and missile threats, with a budget deadline looming on Dec. 2.

Yoon has already been weakened politically by a series of gaffes and controversies, which overshadowed his first major overseas tour last month and have knocked his approval ratings lower, inviting scathing criticism from some lawmakers within his own People Power Party.

The opposition's ire was piqued on Monday when prosecutors raided its headquarters in Seoul as part of a long-running investigation into suspected corruption involving property deals.

Several of Democratic Party leader Lee Jae-myung's former and current confidants have been arrested on charges they took more than 800 million won in illegal political contributions from developers to aid Lee's presidential campaign when it was launched last year.

Lee, who narrowly lost the election to Yoon in March, has denied any wrongdoing, while Yoon's office said it has not played a role in any criminal investigations.

The Democrats have accused Yoon, himself a former prosecutor-general, of ordering the investigation to stifle opposition. They demanded an apology, while threatening to boycott the budget speech.

Yoon refused, saying on Monday that attaching any conditions to attendance at his speech would be "unprecedented in our constitutional history".

Yoon's Tuesday speech called for swift passage of the budget with bipartisan support, to ease households' economic hardship and improve people's livelihoods.

"In order to overcome the grave economic and security situation, there can be no divide between the ruling and opposition parties," he said, adding that he "desperately needs the parliament's cooperation".

The justice minister, who oversees prosecutors' affairs, told parliament on Monday that they were looking into whether bribes were exchanged during the property development process but declined to comment when asked if they were examining the possible use of such funds to help Lee's campaign. (Reuters)